The “Cash for Clunkers” program may be the most creative policy initiative we have seen come from government in a long time. The effect is dynamic and the implementation is simple. For there to be opposition to this bill is mind boggling. In 2003 we saw Bush and his Republican allies pass a tax break (between $75,000 and $100,000) for businesses who purchased a vehicle that weighed 6000 pounds or more. I’m sure a lot of these vehicles are being traded in for the current “Cash for Clunkers” program. The two mindsets are diametrically in opposition and represent the backward thinking of conservatives and the forward imagination of liberals. This 2003 bill encouraged American automobile manufacturers (or at least reinforced their misguided production strategies) to crank out big gas guzzling vehicles. The collusion between the two ended up being a Faustian bargain that would ultimately cripple the American automobile sector.

America’s addiction to foreign oil is unpatriotic. Think of the nations in the world who have oil as the centerpiece of their economy. Saudi Arabia, Venezuela, Nigeria, Iran and Russia are just some of these petroleum dominated authoritarian states. As the price of oil has risen these nations have become less democratic. The money derived from the production of oil has made the governments of these states less dependent on taxation from its citizens. If a government does not have to rely on public excises to run its nation, it is less likely to grant its citizenry representation. This is happening across the board in these states. And these countries interests are becoming more in opposition to our own.

The United States makes up about 3% of the world’s population but we use 25% of the world’s energy. We are a bloated energy hog. The fact that we use such a significant amount of fuel creates a dilemma as South and East Asia emerge from their slumber. It makes it harder for the US to restrain the energy needs of India and China when all they are doing is attempting to become us.

Sending a signal to those outside our country is just a byproduct of this program. The car initiative does so many things at the same time. It brings gas guzzlers off the road and replaces them with energy efficient cars. This not only reduces the amount of gas we use but also reduces our carbon footprint. It also serves two purposes in regard to the automobile industry. It obviously boosts sales but it also helps validate the need of these companies to produce cars that get better gas mileage. But perhaps the greatest thing the “Cash for Clunkers” does that isn’t talked about is the psychological dimension. Everyone is aware of the rationale for the program and clear thinking Americans are seeing that the nation is moving away from large cars. It is rare when government positively alters the imagination of the nation and rarer still when government comes up with a program that does so much for a relatively small amount of money.

The Bush years will most likely be called the “New Dark Age” of energy development. See why in the following video.

Stimulus. The mere mention of the word makes one want to yearn to be interested. It sure has gained the attention of the nation. Republicans just can’t get over the failed notion that tax cuts for the rich produces jobs through “trickle down” economics. All that has done for us is produce greedy Wall Streeters and spiraling debt. Democrats refuse to turn their backs on the social giveaways of the 1960s that lead to more dependence and less initiative. The Stimulus package consisting of over 600 pages. What one comes away with after perusing the bill is much of the bill attempts to pick up the detritus that is transforming the American economy. Many decry the fact the bill doesn’t have enough stimulus in it. The reality is the bill is attempting to ease the suffering of those who are collateral damage in this economic crisis. Much of the funding goes to state and local governments who are buckling from the weight of the meltdown. Maybe the bill is a finger in the dyke. This stimulus package appears to be more a bridge for those who are suffering than job creation measure. Most would like to see more infrastructure spending in the bill. This fact brings me to number two on the things Barack Obama should do as President.

Infrastructure and the Green Economy

If one spends anytime in places like Singapore or Oslo and then compares them to Chicago or Jacksonville it will become apparent that the United States is losing our edge. Singapore is using the interest they make off of US loans and investing in their infrastructure. Their modern airport has internet portals and kid play zones. American airports are functional but dated, dark and dingy. Look at the images when people are stuck in them during a snowstorm.  The Katrina episode pointed to the fact of how antiquated our infrastructure is. The bridge collapse in Minnesota highlighted this notion again. The complacency of America is in full swing. The innovation in the manufacturing sector has gone the way of its workers: overseas. For a nation to be truely viable, it needs to have something to trade. Trade was the instrument on which this nation was built. In large part Britain’s obstruction of unfettered colonial free trade played a large role in the Patriots telling old England to take a hike.

Infrastructure and trade work like a hand and glove. As the manufacturing sector has continued to migrate from the US, its infrastructure has continued to decline as well. At the height of the US’s industrial power following WW II (we were producing 60% of the world’s products), Eisenhower began the most significant infrastructure project of the 20th century; the establishment of the US highway system. American industrialism demanded it. It reminds me of the fact that the roads built by the Romans in their heyday continued to be the avenues by which the Europeans traveled during the Renaissance. Granted, the comparison is not as drastic but our infrastructure is in vital need of repair. For the better part of four decades American money has been bleeding towards overseas ventures. Defending Europe during the Cold War, maintaining hegemony over Japan in East Asia, the Vietnam War, payoff money for attempted Middle East peace in the 70s, the Gulf War, $3 billion a year to Israel, and the war in Iraq to name the biggies. Overseas trade is good but the hemorrhaging of American money is not.

To make the US energy independent should be near the top of President Obama’s list. If this nation can utilize its ingenuity and meet all its energy needs without using Middle Eastern oil, we can make that entire violent region superfluous. A shift away from ultra-militarism and more toward redefining the US economy is the only way to reignite America’s greatness. We have the capacity to develop a green sector in this country. Boundless reaches of this nation are ideal for wind turbines. The Southwest is  perfectly suited for solar energy and with huge investment, both through government incentives and private development, we have the brainpower to create energy in ways we can only dream about as long as those entities with competing interests will not be allowed to interfere. We saw this with the killing of the electric car in the 1990s. President Obama has openly stated he intends to proceed with a new energy agenda. Let’s just hope the economy will allow him to add it to his plate.

What does John McCain stand for? What is his platform? Every commercial I see from his campaign is always about Obama. I find it amazing this man has any support at all. I am challenging any McCain voter out there to tell me what policies he is running on. He says he will not raise taxes so how does he plan to run this country? If he doesn’t raise taxes and he wants to continue the Iraq War without paying for it will we continue to deficit spend to the tune of $400 billion a year? McCain is centering his energy policy on drilling for more oil. How is that going to revolutionize our dependence on foreign oil? The big question is what is the core feature of his platform? What are the three components of his platform that he will deliver within the first two years? To understand the nonsensical nature of McCain’s economic plan simply go to his campaign website and read his proposals. Most, in fact, are not really proposals at all. Take for instance this:  JohnMcCain2008.com. He talks about strengthening the dollar but doesn’t say how he plans on doing so. He also is going to tell foreign oil producing nations our dependence on foreign oil will come to an end. Is that a policy? Look how this is worded. Craziness. McCain’s energy plan includes a $300 million prize for anyone who comes up with advanced battery technology. Obama plans to invest $150 billion in the next 10 years to advance technology in plug-in hybrids, promote development of commercial scale renewable energy, encourage energy efficiency, invest in low emissions coal plants, advance the next generation of biofuels and fuel infrastructure, and begin transition to a new digital electricity grid. Now that is a policy. Some would say the government should not be playing such a large role but we now know energy dependence is a national security issue and since when has the government not been involved in making us safer? Obama is honest. He says he plans on raising taxes. If it requires higher taxes to emasculate the Middle East and Venezuela then I am all for it. So I will be waiting for Republicans to tell me what McCain plans to do to solve the problems we now face. I won’t, however, hold my breath.

Democrat, Republican, Conservative, Liberal, it doesn’t matter. On a day when oil prices rocketed to $140 a barrel based purely on speculation of future oil prices it is time to let your Congressmen know how you feel about this issue. You can guarantee I will be sending out some letters tonight.

From Wall Street Journal’s Marketwatch

Last update: 4:24 p.m. EDT June 23, 2008

Gas could fall to $2 if Congress acts, analysts say

Limiting speculation would push prices to fundamental level, lawmakers told

By Rex Nutting & Michael Kitchen, MarketWatch

WASHINGTON (MarketWatch) — The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.

Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.

Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters’ assessment at a hearing on proposed legislation to limit speculation in futures markets.

Read More

There is a wind these days and it is coming straight out of the garbage dump. Everyone reading this has smelled this retched odor. Gas hovers at or above $4.00 a gallon, depending on where you live and what does the right wing do? They exploit the misery. You could smell it coming. Drill ANWR and drill offshore. Even John McCain, Mr. Global Warming, has gotten into the act. The oil companies are making record profits at the expense of the American people and what do these representatives want to do? Hand them their fantasy scenario on a platter. We all know the recent rise in gas prices are not caused by supply and demand but by speculation. Experts claim as much as 70% of current prices are driven by oil speculators.

Hey, if supply was the issue and drilling was the answer then there would be no debate from here. But drilling only extends the debate into the future. This is why the Bush Administration is calling for it. It allows the current prices to continue and allows the oil companies to drill with impunity, a win-win for big oil and a lose-lose for America. It does nothing to change the playing field. The answer is to change the entire nature of energy in this country and then if we need to tweak our oil reserves we do so from strength.

The issue of drilling has become the leading talking point for Republicans. President Bush stuck his head out of the White House today and pressed the issue. All the Right Wing mouthpieces on radio and TV are touting the message and then you have this character. This should show you more than anything how much big oil has its tentacles around the GOP. As Rep. Issa politicizes the death of Tim Russert, this will leave you shaking your head:

Last week we saw McCain, Clinton and Obama all speak before AIPAC (American Israeli Public Affairs Committee). As a Presidential candidate, no matter your true feelings about Israel, it is imperative to have the Jewish lobby on your side. It is very similar to the fact you must proclaim to be Christian to be President of the United States (or hold significant office anywhere in the US). So there they were, all three, telling the group before them their intent to protect Israel. Even Obama promised to maintain Jerusalem in Israeli hands, an issue the Palestinians (and all Muslims) have a tough time swallowing. Jerusalem is, after all, the third most holy place in Islam. I have always contended that our marriage with Israel is bad foreign policy. By no means do I believe we should abandon the Jewish nation, but our overt support of the state over the Palestinians makes us less safe. Other than regional intelligence provided by MOSAD (the Israeli version of the CIA) Israel doesn’t offer much in the way of a strategic advantage for our support.

The danger of our commitment can easily be seen with what happened on Friday. Friday was a nexus of events and history that renders it significant. First off Friday was June 6th and for anyone who is worth their salt knows the day has historical relevance. June 6th was D-Day, the date the Allies stormed the beaches of Normandy in 1944 which began the liberation of Western Europe. D-Day is perhaps a pertinent phrase for what happened in terms of the economy yesterday. I’ll let Steely Dan provide some appropriate background music.

Yesterday could be labeled a nouveau Black Friday. Gas prices shot up $10 per barrel on Friday in the wake of a $6 increase the day before as the price topped $138 at the end of trading Friday. This sent the stock market tumbling 400 points. What caused these events?

It was largely caused by a statement that came out of Israel.

Israeli Transport Minister Shaul Mofaz said, "If Iran continues with its program for developing nuclear weapons, we will attack it. The sanctions are ineffective." This statement along with the weakening dollar set Friday in motion.

This leaves us with a couple questions. First, what would be the results of an Israeli attack on Iran? And second, why are we, the most powerful nation on the planet, in a position where a second rate Israeli minister can affect the US economy in such a way?

Oil prices have put energy front and center on the world’s stage. As record prices continue week after week, day after day the confrontation with an energy present and future are on the minds and mouths of many.

In Europe oil protests erupted this week. Truckers in London blocked a major artery into the capital on Tuesday. They are putting pressure on PM Gordon Brown to act. Diesel runs at more than $9.00 a gallon there and unleaded gas costs $8.61. The British impose a $3.77 a gallon fuel duty and a 17.5% on top of that. This policy was intended to increase the use of pubic transportation. Many in England these days are questioning the taxes in the wake of surging gas prices.

In France, farmers and fishermen have been protesting for two weeks. They have blocked access to fuel refineries in several locations to display their anger at rising oil prices.

Countries on the edge of poverty such as Mongolia face crippling decisions. People in the harsh climate there are facing decisions between starving or staying warm. As food prices and energy costs run along parallel lines, these decisions aren’t always an either or proposition. In Indonesia rising oil prices have caused riots forcing the government there to subsidize energy costs to prevent an economic collapse.

Since we are dealing with an international crisis there is very little a single nation can do, especially those in the Third World.

Interestingly (and economically viable) the major Western nations are seeing a reduction of demand as oil prices are causing a shift in energy habits. China however has chosen to heavily subsidize fuel prices until after the Olympics, resulting in steady fuel prices there. A billion disgruntled Chinese wouldn’t be a pretty picture for the world’s cameras, especially in combination with the aftermath of the earthquake that hit Sichuan earlier this month.

The price is rising at a much greater clip than normal supply and demand would warrant. OPEC in fact says that the rise is due in large part to oil speculators. OPEC claims there is plenty of oil but they are nearing capacity. Investors claim the surge in speculator activity is attributable to the decline in other sectors such as real estate. The speculators are merely looking for more profitable investments. Without the recent speculation gas would be closer to $50 or $60 a barrel as opposed to $130 a barrel as it sits today.

Whereas the 2004 US presidential election centered on the Iraq War and security, the 2008 version may well pivot on energy costs. $5.00 gas is on the horizon and many are frightened of the prospect this summer. And as we know fear is a powerful political tool.

The credit for the following belongs greatly to my old man.

As Bush spoke in front of the Knesset this week he invoked the preface to WW II. I have thought a lot the past few days about the idiotic comments of perhaps America’s most idiotic president and would like to set the record straight for a man who most likely doesn’t read a lot of history.

When Chamberlain met with Hitler in 1938, Britain was trying desperately not to be plunged into another war; a war they were in no way prepared for nor had the stomach to initiate. WW I was still fresh on their minds and the bad taste the Great War left in their mouths made them less powerful. As the Prime Minister of Britain met with the Chancellor of Germany it was from a position of weakness. The British military (navy excluded) had been downsized in the decades following 1918 and the army they did have was spread all over their empire. By 1938 the Germans had long since defied the Versailles Treaty and were on a war economy. These two powers were going in separate directions. Germany was meeting from a position of strength and Britain was meeting from a position of weakness.

If Obama or McCain sits down with Iran, North Korea, Cuba, Venezuela, Hamas or any other two bit dictator they will not be Chamberlain. The US spends well over $400 billion a year on its military. In 2005 the US military budget was nearly as much as the rest of the world COMBINED and eight times larger than China’s defense spending. This just shows you how much of an idiot Bush is for making that same old sad WW II analogy of appeasement. To make matters worse, this same President proceeds to Saudi Arabia, a country who requires our military technology to keep their people in line, and begs them if they could do us a favor and up the oil production. Our allies in the Gulf merely brush the President of the free world aside like a bum on the curb with a tin cup. Most conservatives would tell the bum to go get a job. Well I’m telling the bum to get working on an energy policy where we don’t have to be beholden to any dictator. Who is the true appeaser?

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My new bumper sticker for the week:

Purge your Sins, Conservatives. Vote Obama

The demise of Hugo Chavez should be a goal of the United States. This left wing nut and compadre to Fidel Castro has revealed he wants to destabilize South America. In a recent attack carried out by Columbian forces, a Fuerzas Armadas Revolucionarias de Columbia (or FARC) top commander  was killed along with several of his supporters. Columbia reports there were documents recovered that revealed the Venezuelan president has bankrolled the terrorist group and there was reportedly information the group was attempting to obtain uranium. The validity of this information may be questioned but Hugo Chavez publicly mourned the death of the slain FARC leader, Raúl Reyes. Hugo Chavez has also colluded with Ecuadorian President Rafael Correa in condemning the attack. The FARC are among the most notorious rebels in South America. In Robert Kaplan’s 2005 book, Imperial Grunts, he writes about the FARC:

The FARC, with its seventeen thousand or so fighters, no longer represented the shaggy haired university idealists of the Cold War era, but a criminal army built on the forced recruitment of teenage boys and girls, in which desertion led to the slaughter of one’s family. FARC leader Manuel Marulanda, perhaps the world’s oldest living guerrilla, might still have harbored ideals. But with an income variously estimated at $500 million annually in protection money and cocaine business, the FARC was Karl Marx at the top and Adam Smith all the way down the command chain. (p.50)

It is reported that Arabs militants such as Hamas and Hezbollah are being funded by the Chavez government. Chavez is also providing secure zones for FARC from which they are trying to destabilize democratic Columbia. The US military has redoubled its efforts in Columbia under President Bush in a policy known as Plan Columbia which began in 2001. The plan has brought a level of stability to Columbia by putting pressure on rebel groups such as FARC and FLN (National Liberation Army), driving the drug trade further underground and also giving President Álvaro Uribe some breathing room. Uribe has an 80% approval rating in his own country, the highest in his five years as President. Chavez has recently called Columbia the Israel of South America because of US’s involvement there. However, Chavez’s own situation in his country has grown tenuous. Anti-FARC protests are common in Venezuela. Their brutal tactics are well known throughout the region. Since the cross border attack, Chavez has ordered troops to the border with Columbia but most see it as bluster since Chavez may not have the support of his generals to do anything drastic. Chavez is a menace and President Bush has done the right thing in bolstering Columbia’s democracy. 

America imports nearly 15% of its oil from Venezuela. Everywhere you turn it appears the snakes are rattling around the barrels. It is a further indication of the need of this country to unify around a policy that rids us of foreign oil. In the meantime Chavez’s popularity in Venezuela has waned and the US should do whatever it can to show this pariah the door.

Finding FARC

Chavez’s War Drums

Columbia Stands as a Beacon of Hope

Venezuela Mobilizes Forces to Columbian Border

Rumours of War